According to http://www.symantec.com/business/support/index?page=content&id=TECH164391 I should be able to add an exception ("Creating an DNS or Host File Change Exception") to get rid of the svchost.exe attempts to change the hosts file.

However, I cannot find this option.

I am running SEP Small Business Edition Version 12.1.3 (12.1.3001.165).